C1C2Part 2Employment income: charge to tax
Pt. 2 applied (E.W.S.) (31.3.2017) by The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 (S.I. 2017/353), reg. 1(1), Sch. 1 para. 4(3) (with reg. 2(4)(5))
F1CHAPTER 10Workers' services provided to public sector through intermediaries
Pt. 2 Ch. 10 inserted (with effect in accordance with Sch. 1 para. 16 of the amending Act) by Finance Act 2017 (c. 10), Sch. 1 para. 9
61NWorker treated as receiving earnings from employment
1
If one of Conditions A to C is met, identify the chain of two or more persons where—
a
the highest person in the chain is the client,
b
the lowest person in the chain is the intermediary, and
c
each person in the chain above the lowest makes a chain payment to the person immediately below them in the chain.
(See section 61U for cases where one of Conditions A to C is treated as being met.)
2
In this section and sections 61O to 61S—
“chain payment” means a payment, or money's worth or any other benefit, that can reasonably be taken to be for the worker's services to the client,
“make”—
- a
in relation to a chain payment that is money's worth, means transfer, and
- b
in relation to a chain payment that is a benefit other than a payment or money's worth, means provide, and
- a
“the fee-payer” means the person in the chain immediately above the lowest.
3
The fee-payer is treated as making to the worker, and the worker is treated as receiving, a payment which is to be treated as earnings from an employment (“the deemed direct payment”), but this is subject to subsections (5) to (7) and sections 61T and 61V.
4
The deemed direct payment is treated as made at the same time as the chain payment made by the fee-payer.
5
Subsections (6) and (7) apply, subject to sections 61T and 61V, if the fee-payer—
a
is not the client, and
b
is not a qualifying person.
6
If there is no person in the chain below the highest and above the lowest who is a qualifying person, subsections (3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the client.
7
Otherwise, subsections (3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the person in the chain who—
a
is above the lowest,
b
is a qualifying person, and
c
is lower in the chain than any other person in the chain who—
i
is above the lowest, and
ii
is a qualifying person.
8
In subsections (5) to (7) a “qualifying person” is a person who—
a
is resident in the United Kingdom or has a place of business in the United Kingdom,
b
is not a person who is controlled by—
i
the worker, alone or with one or more associates of the worker, or
ii
an associate of the worker, with or without other associates of the worker, and
c
if a company, is not one in which—
i
the worker, alone or with one or more associates of the worker, or
ii
an associate of the worker, with or without other associates of the worker,
has a material interest (within the meaning given by section 51(4) and (5)).
9
Condition A is that—
a
the intermediary is a company, and
b
the conditions in section 61O are met in relation to the intermediary.
10
Condition B is that—
a
the intermediary is a partnership,
b
the worker is a member of the partnership,
c
the provision of the services is by the worker as a member of the partnership, and
d
the condition in section 61P is met in relation to the intermediary.
11
Condition C is that the intermediary is an individual.
12
Where a payment, money's worth or any other benefit can reasonably be taken to be for both—
a
the worker's services to the client, and
b
anything else,
then, for the purposes of this Chapter, so much of it as can, on a just and reasonable apportionment, be taken to be for the worker's services is to be treated as (and the rest is to be treated as not being) a payment, or money's worth or another benefit, that can reasonably be taken to be for the worker's services.
Pt. 2 applied (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), ss. 969(4)(a), 1329(1) (with Sch. 2 Pts. 1, 2)